French Mortgages - Top 5 Tips
The French property market has become increasingly attractive to foreign investors in the past year, thanks to record low mortgage rates and the level of interest shows no signs of abating.For those waiting to evaluate their budget, in terms of affording their dream home in the French Alps, here are our top 5 tips.
1) Prepare to show 'rainy day' funds
French banks are very keen to see that you have a 'buffer' fund available, should anything unexpected happen, this provides the bank with a level of confidence, you have the means to handle it and that sound planning is part of your day to day practice.
2) Be clear on the eligibility criteria used by the banks
French banks are certainly keen to lend to overseas investors, as long as they meet their lending criteria. It is worth understanding that French Authorities do not have access to credit scoring data, as lenders do in the UK, which means applications are assessed on proof of income. This means you must have access to three years tax returns, 3 months income is required for those who are employed, with three years required for those that are self-employed.
3) Always seek professional advice
One of the main reason why French mortgage rates are so low right now, is that the banks are strongly competing for buyers. We can put you in touch with an international mortgage broker, who specialises in French Mortgages for non-residents, who has access to a wide range of products, at the best rates, at no extra cost. Contact us for more details.
4) Always be confident of rental returns
For standard rental properties and those purchased under a leaseback scheme, it is always important to be confident about the returns you can expect, especially if you are factoring the income into your own personal affordability of the property. For leaseback properties, because of the guaranteed income, banks will factor the returns into the overall amount they are prepared to lend you, but you need to be confident in your mind, that the property will continue to generate this income.
5) Understand the system
The French Mortgage system is without doubt, more regulated than in the UK but with this regulation comes increased security and the benefit of lower rates, over a longer period of time. However the downside to this is the application process can take longer, so take this into consideration, when going through the planning process on finding your ideal property. Plan ahead, find out how much you can borrow in advance and have the necessary documentation ready and available, as soon as you are ready to make your application. Planning ahead is always advantageous and certainly worth it.
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